IRS Cuts May Come Early If New Spending Agreement is Approved

IRS Cuts May Come Early Thanks to New Spending Agreement

( – The bipartisan Inflation Reduction Act of 2022 increased funding for the IRS by $80 billion over the next decade. The money is supposed to be used for operations support, enforcement, taxpayer services, and business system modernization. Even though the funding passed with support from both parties, Republicans have looked for ways to rescind it.

The House has repeatedly failed to push through bills that would reduce funding for the agency. Recently, negotiations over the next spending bill chipped away at the funds. However, not everyone is on board with the deal.

IRS Cuts

Congress has until January 19 to pass four appropriation bills to keep the government open. Senate Majority Leader Chuck Schumer (D-NY) and Speaker of the House Mike Johnson (R-LA), along with other leaders, recently negotiated a spending deal to avoid a partial government shutdown.

On Sunday, January 7, Johnson and Schumer announced they reached a deal for top-of-the-line spending of $1.66 trillion. It essentially keeps the spending limits the same as they were in the deal that former Speaker Kevin McCarthy (R-CA) reached. The new negotiation included a $10 billion spending cut to the IRS during fiscal 2024 and a total of $20 billion in cuts. That is one year earlier than the deal Democrats reached with McCarthy.

The Hill reported Johnson sent a letter to lawmakers on Sunday that stated he’d been able to achieve the reductions to the IRS. The deal was a major win for Republicans, who were able to get rid of one-fourth of the $80 billion allotted for the IRS. Janet Holtzblatt, the former head of the Congressional Budget Office’s tax policy studies, said the deal opens the door for more cuts down the road. She said that it isn’t good for the IRS.

Republicans aren’t particularly concerned with what’s good for the IRS. They have been more concerned about what’s good for the American people, and they believe the IRS has been targeting Conservatives. The cuts are meant to put a stop to that.

Anger Over Spending Bill

Although Johnson got Democrats to agree to massive spending cuts, that still hasn’t made everyone in his party happy. The House Freedom Caucus, the group responsible for pushing McCarthy out over an almost identical deal, issued a statement on X, formerly Twitter, saying the new deal was a “total failure.”

Reports indicate Conservatives are now trying to come up with an alternative deal, claiming the one Johnson announced is dead.

Rep. Ralph Norman (R-SC) said there would be a stopgap bill to keep the government open, but he doesn’t believe the bill Johnson announced is going to move forward, saying, “It’s not going to be the current deal” when talking about an alternative plan.

Johnson, however, said he has “made no commitments.”

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